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State Informs 2,000 Taxpayers They Underpaid, Except, They Didn’t

5-19-14

By David Cruz
Correspondent

Gov. Chris Christie says he will unveil his plans for closing an $800 million budget gap later this week, but a Treasury Department glitch could result in extra money for state coffers, at the expense of unsuspecting taxpayers.

“I was angry,” said Meg Bracelin, one of an estimated 2,000 New Jersey taxpayers who got a notice from the state’s Treasury Department informing her she owed them money — because she had underpaid her estimated state income tax. In her case, by $410. She immediately called her tax preparer.

“She immediately responded and said, ‘Do not pay the bill,’ that New Jersey has made several thousand errors in sending this notice out to people and that she would look into it for me,” she said.

Turns out, Meg had received the notice in error, the result of some as yet unidentified glitch at Treasury. But if you’re one of the 2,000 people who took the letter at face value and paid the money, you’re not going to hear from the state that they screwed up.

“It just reflects on the attitude we have on the working class in this state and it’s really a shame that we have to subject people to this,” said Assembly Budget Committee member Gordon Johnson. “They notified that they underpaid their taxes and the good taxpaying people who pay their taxes and they’re not gonna tell them we made a mistake. It just doesn’t make sense to me.”

Johnson says the state is unlikely to make much of a dent in its budget gap from these funds but thinks it demonstrates a lack of basic customer service. Tax preparer Mahendra Ramnauth says taxpayers need to verify anything they get that could cost them more money.

“Most people don’t question the fed or the state when it comes to tax issues, but, you know, mistakes are made, things happen,” said Manhauth, adding that if you get a letter from the state or state agency saying that you owe money, the best thing to do is “Call and ask why, and have them clearly explain what it is that they’re looking to get payment for.”

The glitch only affects about 1 percent of the over 200,000 taxpayers who estimated their state income tax. Treasury Department Spokesman Joseph R. Perone issued a statement late today, which read: “A small group of taxpayers who make estimated payments inadvertently received notices of underpayment from the Division of Taxation. The Division has corrected all of the accounts, and all overpayments will be refunded presently. Taxation has briefed the accounting community on the situation. If a taxpayer received a notice indicating an underpayment for their 2013 NJ1040, please contact us at 609-292-6400 and we will confirm the account balance.

“We regret any inconvenience that this caused for the taxpayers involved. The error was quickly corrected and affected only 2,000 accounts out of 3.9 million filings that the state processes every year,” he said.

Budget Committee members say they’ll have plenty of questions for the state treasurer when he appears before them Wednesday. Chief among them: why is the state so quick to inform taxpayers when they underpay, but hesitant to inform them when they’ve overpaid?